What affects the price of cryptocurrencies?
Over the past years, the digital currency market has gathered a multi-million-strong community among others from traders, speculators and investment funds. This was mainly due to high volatility of those assets whose price movements are very dynamic and create potential earning potential.
Beginner investors should pay attention to the price when starting cryptocurrency trading Bitcoin, trying to interpret it in the context of macroeconomic, market and political. This is due to the fact that the entry of large institutions and companies, such as GrayScale or Tesla, most likely ended the period in which cryptocurrency prices moved in a manner uncorrelated with the traditional stock exchange.
Vitalik Buterin, the creator of the second most popular cryptocurrency - Ethereum, recently returned attention to the fact that the price of Bitcoin moves in a way that is strongly correlated with the index US tech companies on NASDAQ. This is an important aspect because the price Bitcoin is treated as an indicator of the condition of the entire crypto market, where a large price drop the oldest of the cryptocurrencies most often also causes drops in other coins. All that creates a system of connected vessels - from the "classic" exchange to the latest "altcoins", that's why it is important to keep up to date with important economic events.
Other factors that have a significant impact on the price of cryptocurrencies include:
- Information on market entry or exit by large institutions and companies
- Actions taken by the largest Bitcoin holders - the so-called “whales”
- A growing market for Metaverse concepts
- Information on the further adoption of blockchain technology
It is also worth noting that the cryptocurrency market is highly susceptible to the so-called "information noise", occurring most often in social media, where individual entries are known people have already had a significant influence on the formation of prices largest cryptocurrencies. A perfect example here is the case of Elon Musk, whose tweet about him considering withdrawing Bitcoin as accepted by The Tesla of the means of payment was caused by a several percent drop in the valuation of this currency.
By trading on the XTB trading platform, the investor gains access to tools enabling monitoring of the current market situation, e.g. for news and analysis prepared by a team of professional Analysts. At the same time, built in platform, advanced technical analysis tools allow you to interpret movements prices and their assessment at every stage of the investment process.
